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China’s Digital Yuan Will Launch Before 2022 Winter Olympics Games

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china

China is leading the world in the race to develop a Central Bank Digital Currency (CBDC). However, while the government has been open about its end goal, not much is known about the process. One of the unknown details is the upcoming digital yuan is its launch date. Adding to the many estimates, a new Reuters report claims that the asset could launch in two years.

Plans for the Upcoming Winter Olympics

The Reuters report cited a statement from Sun Guofeng, the head of the monetary policy department at the Peoples’ Bank of China. Sun explained that while the Bank doesn’t have a timeline for the asset’s launch, they plan to do so before 2022 as the government wishes to have the asset around for the Winter Olympic Games.

This news puts to bed the rumors that China would launch its digital currency in 2020. Once again, it only goes to show how hard it is to predict the asset’s launch timeline.

Despite the uncertainty, it’s obvious the government is ramping up efforts to deploy a pilot. Tests for the digital yuan began in May, with efforts focused on regions such as Shenzhen, Suzhou, Xiongan, and Chengdu. Since then, the government has speedily incorporated new regions to join in. Last week, the Wall Street Journal reported that the government had added several areas to the CBDC tests — including Beijing, Tianjin, and Hong Kong’s Greater Bay Area.

The Peoples’ Bank has helped clarify some details, however. Earlier this week, it published a statement debunking rumors that had been about the asset, including its conversion into banknotes and the scope of the tests.

No Progress in the United States

China’s progress with the digital yuan has raised concerns for many. Whether its worries about economic advancement or the potential of replacing the dollar as the global reserve currency, concerns have arisen about the United States lagging.

This week, Chris Larsen, the co-founder of blockchain giant Ripple Labs, wrote in an article that China’s focus on optimizing its mobile payments sector had given it the advantage over the U.S. in the ongoing “tech cold war.”

Like many, Larsen pointed out that China’s digital yuan could usurp the greenback. He also pointed out China’s entry into Hong Kong — both in terms of security and financial development. As he explained, this move would give the country control over two of the world’s financial hotspots.

Concluding, Larsen emphasized the U.S. government’s need to recognize “strong tech companies” and their significance to its national security plan. He added that the government should also begin the digital dollar initiative to keep up with China and its digital yuan. This step would include establishing Silicon Valley as a possible global financial powerhouse.

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